First month of moving to FIRE

[Bunniwarrior]

Dear GCC community-  June was our first month on being better at saving.  My fianc?e stopped buying coffee at Starbucks and I made our breakfast, lunches and dinners every day.  We didn?t go out to eat even once which is the longest period of time of being dinning our sober. To our disappointment, we still spend a little under $4K 🙈not including our rent that?s $3750 but luckily paid by his company.  Some things we could have gone without is my mindfulness workshop and classes that costed $500.  Then I paid $122 for taxes on a flight to Dominica Republic for my bachelorette party.  Salsa 💃 classes for both of us where $300.  We also spent about $160 on a round of drinks for a friend?s birthday and her gift. The rest of the cost was groceries, transportation (public), doctor and small things that add up.  We feel a bit discouraged and this month of July we went back to our old routine and ate out all weekend. .  After reading one of your articles again, I?m determined to get back on the horse and concvice my fianc?e.  He said let?s just find a job we like till retirement so we?re happy.  But we have barely tried.  I know I can live on less and be happy. Plus I come from less where he?s come from a much more comfortable life style.  Send us positive vibes and the strength to be disciplined to save for our financial freedom.      Have a gorgeous day!!

[gocurrycracker]

Habits die hard. Give yourself credit for the $ you didn't spend on dining out... think of how much more expensive June would have been had you dined out per normal.

Sometimes it helps to use a little lifestyle design to make saving the normal and natural outcome, as opposed to a struggle
https://www.gocurrycracker.com/lifestyle-design/

[Bunniwarrior]

Thanks for the positive outlook Jeremy.  We spent about $1k on groceries from the local butcher shop and get boxes of veggies sent to us.  I think we can work on eating less meat which will help us save and is better for us and the environment.  Food and public transit was the highest cost after my classes.  Thank goodness we don?t have to pay for housing or the car at the moment.  Otherwise we wouldnt save anything.  Lol 🙈.  Public transit is expensive in Sydney compared to the US. 

?Some people are naturally frugal. I?m naturally lazy. (Just ask my wife.)?. <= so funny!   You and my fianc? should be best friends.  Haha.  Love him to bits though

Cheers!!

[Bunniwarrior]

Hey Jeremy and GCC Community. 

I know you can't give advice and don't really want to, but I"m going to ask for your insight and make my own decision.  My brother said he thinks the market will take a big dip and the best thing to do is to transfer all my stock into cash.  My fiancee thinks the same.  I don't know or understand the stock market.  My account is in a diversified, relatively aggressive Charles Swabb account with Index funds.  What are you doing? 

Thanks,

Bunni

[gocurrycracker]

Edited...

Everybody and their brother (and fiancee) believes that they can outperform the market in the short term. 99.9% of them fail to do so.

I make it a point to only take advice from people who are successful doing something at which I also want to be successful. That includes investing.
As an example: would you take medical advice for a serious condition from a bicycle technician you met at Whole Foods? Or your brother?

Or: Is Warren Buffett going 100% to cash at this time? I don't believe so.

There is a Fidelity study where they looked at long term performance of account holders... and the ones that performed the best were dead or forgot they had the account. In other words, they did nothing.

The best thing you can do is be like one of them (the alive ones.) Put your investing on auto pilot and forget about it.

The next best thing you can do is to read something to know and understand the stock market at a basic level, so that you feel comfortable putting your investing on auto pilot and forgetting about it.

This book is a good start:
https://www.gocurrycracker.com/book-review-the-simple-path-to-wealth/

[Bunniwarrior]

Thanks for your insight Jeremy.  I do have it on auto-pilot and proudly with tax loss harvesting that I discovered a couple months ago.  I wished my fiancee would read up more on investing and we could learn more together.  I'll take a look at the book link you sent me and will ask him to read it as well.  Much love and peace to Junior and Winnie.  Cheers!   

[gocurrycracker]

Also look at JL Collins' stock series

This post is a good one:
https://jlcollinsnh.com/2012/04/19/stocks-part-ii-the-market-always-goes-up/

The stock market goes up. The stock market goes down. I don't know which will happen today or tomorrow. Nobody else does either. But in 30 years it will be higher than today.


Related: my own experience coming to peace with the stock market
https://www.gocurrycracker.com/exposure-therapy/

[prognastat]

He is right. The market will take a big dip. The question though is when will this happen and unless you can answer this very accurately and reliably(which no one seems to be able to do) you are more likely than not going to either pull out too early, missing out on gains or put it back in either too soon or too late losing out on earnings. Also during your time out of the market you are also missing out on dividends from the stocks paying those out.

[Bunniwarrior]

Hi Jeremy and Prognastat-

It?s almost been a year since my post on 1st month towards FIRE.  I?ve been doing extra projects besides my 9-5pm and we?re still on the ball of saving.  To our surprise, after we?re 1.5-2 years from our goal and it?s so exciting.  It?s also scary because my fianc?e has a really good stable job... golden handcuffs where he?s afraid if he leaves he won?t be able to get a high paying job like that.  He says we don?t have a second stream of income like you and Millennial Revolution with your blogs.  What are your thoughts on that?  He thinks we should do a blog too, but then it would feel like a job as well, but perhaps better since you?re your own boss.  If you didn?t have GCC as a second stream of income, what else would you do?  I see you have a ?how to start a blog? section.  Is Winnie?s blog also making a good income every month?  Has your 40k budget a year now expanded to 80k or something because of your bigger portfolio?  I read in one of your articles you spent over 100k one year... Lots of questions Jeremy, hope you don?t mind. 

Also, do you meet up other FIRE people? 

Hope all is well.

Cheers!

[prognastat]

Congrats on the progress.

One more year syndrome is definitely a real thing. It seems the better people's income is the harder it is to say no to just a little longer, but you have to keep in mind that there's definitely a diminishing return on investment the lower your SWR goes. At 4% there's about a 90% chance of success and once you get to about 3.5% you're at about a 100% for any period in the recorded US stock market. Beyond this point you are pretty much only at risk in the event of a total collapse of the US economy and if this were to happen well we're all screwed whether we are on the FIRE path or not.

You have to ask yourself whether it's worth it after a certain point though. Is it worth working 2-3 years extra for a few extra % in security. Also the odds are far higher that you'll actually get far too wealthy than that your portfolio fails.

However the whole point in FIRE is that you can do whatever you want after hitting FI. You can start a blog, the big question is do you want to? If you're unsure why not start one before getting there and see if you like it? It definitely shouldn't be necessary for FIRE though. There are plenty of people on the various FIRE forums that have stopped working and don't have blog income.

If he is feeling antsy about it, maybe it's worth tracking both your annual expenses and investment growth without contributions to compare the two. Maybe if he sees that the investments are growing faster than your expenses even without the contributions this will make him feel better about the plan.

There are also other things to consider that add a buffer of safety. In the event that the market takes a big dive if there is some meat on your expenses post FIRE then in really bad years you could cut down to a more stringent budget until the market recovers or if you want you can work a part time job to only cover your expenses until the market recovers. If your expenses are pretty low you don't even need to go back full time to a high paying job. Chances are a lower paying and/or part-time job would probably do the trick. Doing one of these or both would drastically reduce risk even if you FIRE at a SWR that doesn't ensure 100% success.

As for meeting FIRE people in person I've yet to meet any though I did find out one of my former coworkers started following MMM which was a pleasant surprise.

[gocurrycracker]

If you didn?t have GCC as a second stream of income, what else would you do?  I see you have a ?how to start a blog? section.  Is Winnie?s blog also making a good income every month?  Has your 40k budget a year now expanded to 80k or something because of your bigger portfolio?  I read in one of your articles you spent over 100k one year... Lots of questions Jeremy, hope you don?t mind. 

Also, do you meet up other FIRE people? 

Hey Bunniwarrior, congrats on your progress. There is a lot to think about as you get closer to not needing a job for money.

The point of being financially independent is to do what you want. What is that?

The other questions don't really matter compared to that one.

Starting a blog is a terrible idea. You are almost guaranteed to not make money on it, unless of course you do.

If you want to start a blog for some other reason besides making money, then it might be fun. Winnie's blog made about $100 last year.

We still spend less than 4% of our portfolio value. The blog income just means we will die with more money.

As prognastat states, there are a lot of different ways to manage risk in your early years.

You can work at a job you enjoy. That might be the one you already have.

You can live in places where you spend very little. That's what we did. We always planned to spend more than $40k, we just started in places where $40k bought a $100k/year lifestyle.

Etc...

I've met several hundred people who read GCC over the years. We are always up for a coffee if you are in the neighborhood.

[bbates728]

Hey Bunni,

Congrats on the progress to this point so far! I am looking forward to being in your shoes though I don't look forward to the inevitable golden handcuffs that I will feel. I think my strategy will end up being to keep a typed up letter of resignation on my laptop that isn't dated then stay at my job until something particularly upsetting occurs. This will give me the peace of mind to pull the trigger on leaving when I no longer want to be there and the confidence that I can make my position more enjoyable with minimal risk. Even if I end up just severely not interested in the next big corporate initiative, I can just date my letter, sign my name and ride off into the sunset.

To me, the point of FIRE is to have options. It isn't to feel trapped in making one decision or another as soon as I hit my targets.

[Bunniwarrior]

Thanks for your input Bbates, Prognast and GCC!

If I felt FI, I would just want to spend 1-2 months helping my sister raise my niece, learn salsa, paint more, get better at Spanish, volunteer for a few months and dance outside in circles with flowers in my hair.  Lol.  At the moment I don?t see any of those jobs yielding extra income which my fianc? is worried about.  He wants more passive income besides my condo and the investments.  Ok, no blog for now . My heart isn?t really in it at the moment. 


? Question :  what did you mean Prog when you said ? Also the odds are far higher that you'll actually get far too wealthy than that your portfolio fails.?. I don?t understand

Laying it out..
So We only need 33k left to reach our goal because I want to go to Antartica, spend 10k on a tiny wedding (no judging) and have a yield shield like Millennial revolution.    Thus we can retire really at the end of the year.  I agreed to work one more year to go over our goal amount.  He just told me TONIGHT that he thinks we should move the target and save 250k more!! I?m like FML...  It?s the fear of running out of money and having to beg for a low income job.   I don?t want to work my crappy, meaningless job anymore. Sorry for the rant.   I told him I will quit first then but of course misery loves company and he wants me to work too.  He finds his job tolerable.  Someone needs to talk to him.

Yes, I think if he met you Jeremy and other FIRE 🔥 people and got more info, he would feel better and more empowered. .  We have been thinking about going to Taiwan to check it out.  Maybe we can see you guys next year... otherwise we are in Chicago in November and still in Australia. 

Jeremy-  what did Winnie do for 3 years when she retired early? Just curious.

We have over 1M btw- so we are definitely playing it safe already and on 3.5%. 

Any ideas on what to say to him so we don?t just keep working and die?

[gocurrycracker]

? Question :  what did you mean Prog when you said ? Also the odds are far higher that you'll actually get far too wealthy than that your portfolio fails.?. I don?t understand

It means most of the time historically you would have died with a ton of money. The 4% rule is called the 4% rule because that was the worst case... more likely you would have been able to spend 5%+ and be fine.
https://www.gocurrycracker.com/you-will-die-before-you-run-out-of-money/

spend 10k on a tiny wedding (no judging)

Spend as much as you want on whatever you want. It's your money.

Jeremy-  what did Winnie do for 3 years when she retired early? Just curious.

Pretty much the same as now, just that I was working. She went to U of Washington for photography, learned to make kimchee, kombucha, bread, soap, worked her way through a few cookbooks, started painting, etc...

He wants more passive income besides my condo and the investments. 

He just told me TONIGHT that he thinks we should move the target and save 250k more!!

he wants me to work too. 

Relationships are complex... It sounds like you are not on the same page / have different goals.

I think if I told Winnie that I wanted to work longer and that meant she had to also (why though?) she probably would have punched me in the face.

Someone needs to talk to him.

Any ideas on what to say to him so we don?t just keep working and die?

Nobody is ever convinced of anything, they have to come to an idea and conclusion on their own.

There are some people who have written about "how to convince your significant other to retire early" which you might google and read, but providing somebody with more information seldom is a solution. He is either interested and reads things or doesn't. He is either ready or he isn't. Doesn't mean you have to accept that...

Yes, I think if he met you Jeremy and other FIRE 🔥 people and got more info, he would feel better and more empowered. . 

This helped me (kinda) as I met a couple early retirees in places we were going to be anyway. It was already mostly figured out and decided, but nice to chat with some people who had been there / done that.

Many years ago, my brother and his (now) ex-wife were buying a house. It was a bad decision all the way through. But she wanted a house, so.... they got one. She also wanted a 30-year mortgage and I suggested to him that they get a 5-year ARM instead because they weren't going to live there for 30 years anyway. She said no. So my bro asked if I would just chat with his wife about the math and all, so I did... super casually... and she has hated me ever since.

So they got a 30-year mortgage, sold the house about a year later (to buy a bigger one), and paid several thousand dollars extra in interest during that time. Then they got divorced and the bank reclaimed the 2nd house.

Anyway... this is all to say that no single conversation is guaranteed to change anything.

But... I've probably had coffee with 200+ readers by now, and am always happy to chat for an hour over a nice beverage.

[prognastat]

Indeed. If you for example FIRE on 1 million and do a 4% SWR. There's about a 5% chance it will have run out by 30 years. But there is actually a much higher chance(over 50%) that you'll end up with far more than you started with. If someone was terminally ill and were told the procedure to take care of it had a 95% success rate most would feel pretty good about their odds. For the 4% SWR the odds are the same. At 3.5% SWR the historical failure rate is about 0% meaning at no 30 year period of the stock market history would you have run completely out of money by the end. This isn't of course to say that we might not run into unprecedented times and end up failing even at a 0% failure rate historically. However, nothing is ever 100% sure in life and it could also go in an unexpected other direction. Possibly AI turns out successfully and all your money in the markets affected grows even faster than expected while prices on goods drop due to decreased in labour costs making you even better off. Truth is things could turn out worse than ever before, but they could also be far better and no one knows for sure so historical data is the closest thing we have.

As for the situation with your husband I definitely agree with Jeremy that it doesn't sound like you two are on the same page and he hasn't really agreed to FIRE even if maybe he has said so in the past he isn't really convinced. You can do your best to provide information, but unless he truly comes to the conclusion that he wants FIRE and that it is feasible to him he this likely won't change. First thing you would want to figure out is what is underlying this. Is he truly fully on board with FIRE and is he simply suffering from one more year syndrome which hits even people that are in to FIRE and not being dragged along by a spouse because people might not like their job, but generally it's a familiar menial dread rather than an emergency and what's just a few more months just in case. Then a few months later you think the same thing and on and on. This might be solved by really going into the numbers and doing your calculations for your own situation to convince yourself that you have enough. There is another possibility though in that he isn't really on board with FIRE yet, he might just have been humouring you on the spending/savings side of things to avoid an uncomfortable conversation and now that you are close to goal those can't be avoided anymore. A lot of people base what is normal and acceptable on what they see those around them do. If this is the case it's going to be very hard to convince him, seeing some people that are FIRE might help, but it is likely that even those would be drowned out by the constant onslaught of consumerism in the US. Chances are just about everyone besides you in his life is a dyed in the wool consumer and worker and believe that's just what life is.

I would say though that although it's fine if he decides he wants to keep working it isn't ok to force that on you. If you are comfortable with your stash and he isn't you shouldn't have to work extra until he is comfortable if ever(keep in mind it very well might be never). Work towards getting him to accept you being FIRE/not working and showing what can be gained and hope he eventually comes around seeing that the world didn't fall apart when you stopped working.

As Jeremy said though I've seen very few people drastically change their mind on important things and I was never able to convince my ex on FIRE myself. I tried selling the dream of being FIRE. I tried with a slideshow with the data to sell it as being viable. I tried sharing blogs that talked about the concepts. She never read any that I know of or at least never discussed them if she did. It mainly came down to what I was trying to do wasn't normal and it made her uncomfortable. At the same time she didn't mind her work as much so there wasn't a drive to get away from it.

Besides my ex I've also tried to change the minds of siblings, in-laws and some friends and I can't really recall a single time I've been able to affect a major change in someone even when it seemed like they were open to feedback/changing things. Habits run deep. The only person I think I've had some influence on decisions they've made might be my mom and she is already more similar to me than most so I'm not sure if I can completely count that as a win. So I would start from the mindset that you probably won't change any minds and if you do then you got very lucky.